Posted on 03/14/2015 6:33:43 PM PDT by RightGeek
With global moral hazard having long ago become institutionalized, and codified as "monetary policy", catering almost exclusively to the TBTF entities in the financial sector, we were surprised it took as long as it did for Obama to announce (as he did last week), that the administration is now studying "new bankruptcy options" for student loan borrowers: code word for an across the board student debt moratorium, or forgiveness.
To wit from "Student Aid Bill of Rights: Taking Action to Ensure Strong Consumer Protections for Student Loan Borrowers":
The President is directing his Cabinet and White House advisers, working with the Consumer Financial Protection Bureau, to study whether consumer protections recently applied to mortgages and credit cards, such as notice and grace periods after loans are transferred among lenders and a requirement that lenders confirm balances to allow borrowers to pay off the loan, should also be afforded to student loan borrowers and improve the quality of servicing for all types of student loans. The agencies will develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings and when they were borrowed under fraudulent circumstances.
The President is directing his Cabinet and White House advisers, working with the Consumer Financial Protection Bureau, to study whether consumer protections recently applied to mortgages and credit cards, such as notice and grace periods after loans are transferred among lenders and a requirement that lenders confirm balances to allow borrowers to pay off the loan, should also be afforded to student loan borrowers and improve the quality of servicing for all types of student loans. The agencies will develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings and when they were borrowed under fraudulent circumstances.
Well, it didn't take long for virtually every leftist group: from the Daily Kos, to Democracy for America, to Campaign for America's Future and many more, to jump on this bandwagon, and demand - you guessed it - that the administration "cancel all student debt."
Sure, why not: leaving aside the very touchy topic of personal responsibility and accountability, in a world in which record debt is merely "replaced" by even more debt, and in which profits are privatized but losses are always socialized with taxpayers and future generations bearing the brunt in the form of a record $18.2 trillion in public debt (and some $7 trillion more if one adds the government-backed GSEs which one should), why not go ahead and "cancel" the debt. And don't bother trying to explain the simple math that debt is never cancelled, as every liability is someone's asset, and that asset holder will demand to be made whole in the form of more debt elsewhere or else, like Hank Paulson in 2008, it will scream mutual assured destruction and threaten to blow up the world unless bailed out.
In short, what all the concerned entities listed above are saying is not "cancel all student debt", which is impossible, but share the burden of the 43.2 million "student debtors" shown in the chart below, with everyone.
After all, "it's only fair."
Finally, since nobody, anywhere is harboring any doubt that any of the record debt the world is burdened with will ever be repaid, and instead will eventually be hyperinflated away even it means paradropping bags of cash, this proposal actually has a good chance of passing (sorry future generations not only in the US but around the globe).
Once it does, and once colleges know they can charge anything for tuition, room and board - because the debt funding it will be socialized and ultimately "forgiven" - prepare for the green line below, already exponential, to go... vertical.
As soon as the Student Loan Programs were taken into the Government, I figured this is what Obama wanted. An accelation into bankruptcy for the USA.
It would be only fair to cancel all taxes also.
Ok, so who is going to pay? All of us high school grads? . . . thought so.
they should maybe find Employers who would be willing to help by paying them enough to cover thier DEBTS
other than that theyre out of luck in MY country!
Actually, I’m for this as long as the colleges have to pick up the tab. :)
If they pay off all student debt does that mean I will get a refund for being responsible and paying off my debt years ahead of time??
I am guessing NOT....
If students were allowed to get refunds for worthless or substandard degrees, the product would greatly improve, schools would be more selective, and liberals would have one less racket.
I think there’s going to be some restructuring that has to be done to stop it.
Loans probably will have to stop being subsidized. I also think it’s a bit ridiculous that the bankruptcy laws were changed to make it impossible to default on them. A loan is a loan.
Doing so stops the universities from inflating tuition with junk programs and services that aren’t needed.
Duquesne for example responded to decreased enrollment by cutting its MBA costs by 25%. Imagine that, it boosted enrollment!
We should complain about racial discrimination that this will cause. After all, blacks go to college at a lower rate than others so they do not take out as many loans. Hence the rich honkies get loans cancelled but the blacks, not so much. THERE IS THE RACIAL DISCRIMINATION ANGLE!
Jim Crow, anyone?
We should start a Petition that sates should they pay off all the EXISTING student debt that they will take people who have paid off their Student Loans before they were due and Pay them 2X the amount they paid back????
I mean it is ONLY FAIR, RIGHT???
And we want to REWARD GOOD BEHAVIOR, RIGHT????
It will lock in the millennials for her.
I’ll want a refund for paying cash up front.
The “Cancel all student debt” movement is sort of like a an automatic Democrat-campaign-ad generator. Obama and all his minions know that the Republicans would never let this happen so they can crow about it endlessly.
“President Obama and (*Democrat candidate name here*) have been fighting to forgive all student debt so that hard working young Americans can join the middle class, but the Republicans would rather give tax breaks to their millionaire friends...”
I signed up and created an account at @clintonemail.com
mwahahaha
It would be only fair to cancel all taxes also.
Damned right!
When the consequences for student loans go away, why not the IRS,....
Can we also have all credit card debt also be erased, and car payments... we want to be the generation who never took any responsibility
Great point! That is what I was thinking too.
Only canceled but if you vote Democrat for life
The biggest Trojan Horse banking interests have raised since the creep in the WH.
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